Recession is winding down

The New York Times reports today that “The latest government report shows the economy contracted at a 1 percent annual pace in the second quarter, a better-than-expected showing and the strongest signal to date that the recession, the longest since World War II, is finally winding down.”

“The Commerce Department said the slippage in gross domestic product for the April to June period came after the economy was in a free fall, tumbling at a 6.4 percent pace in the first three months of the year, worse than the earlier estimate of 5.5 percent. That made the first quarter the worst for the economy in nearly three decades.”

The economy’s long, churning decline leveled off significantly in the second quarter, as stock markets started to recover from their worst levels in a dozen years, some housing markets stabilized and the rampant pace of job losses tapered off.

Now, even with jobs still vanishing and wages flat, many forecasters expect the economy to touch bottom sometime in the next few months. Economists say that businesses from small manufacturers to big automakers are poised to rebuild their depleted inventories, which would spur modest economic growth later this year.

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